January 12, 2020 — Market Continues to New All-time Highs

NASDAQ COMPOSITE 9178.86    +1.75% (week)

BDH Dashboard Barely On “4” BUY Signal

This will be a shortened blog as is the case every other week, if markets haven’t had big moves.

Market Performance

The three major market averages had a quiet week with another week of hitting new highs. For the week, the NASDAQ Composite was the clear leader with a rise of 1.75%, the S&P 500 gained 0.94%, and the DJIA advanced 0.66%. 

For the:                 2020 YTD       

NASDAQ            2.30%    

DJIA                    1.00%    

S&P 500              1.07%     

BDH Strategy      0.72%        

All indicators are on BUY signals and we remain in a 100% invested position

Market Internals Improved Over Past Month

The percentage of the NYSE stocks are above their 200-dma  dropped slightly to 71.08% from 72.06%, the previous week. More importantly, the percentage of NYSE stocks above their 50-dmas also declined to 70.95% from 75.14% the prior week

The number of new 52-week NYSE new highs was 472 compared to 366  the prior week.  When markets are making new highs as they have been for months, the number of NYSE highs should be in the range of 800 to 1000, so the current reading is well below average.  That continues to indicate that many stocks are doing that well compared to a group of high capitalization leaders that are holding up the market.   

BDH DASHBOARD  –Remains on “4” Maximum BUY Signal

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator gave its last BUY signal on December 16, 2019.  Refer to $comp chart below.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a BUY signal on October 14, 2019 that is still in place.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 1, 2020 Bullish Percentage reading was 37.2% down 4.7 percentage points from the previous week. This indicator issued another confirming BUY signal on August 21, as it when from below 25% to above 25%.  There have been numerous confirming BUY signal along the way from its last major BUY signal on December 7, 2018.

Indicator #8 NASI Summation Index and MACD.  This indicator gave its last a buy signal on December 19, 2019. Refer to $NASI chart below.

BDH Decision Page – BDH Dashboard ETFs 

The link: https://www.etfscreen.com/buydonthold/bdh-decision-page.php

On ETFscreen.com, the Decision Page indicated that 38 ETFs out of 44 have “pass” ratings which is to be expected in a strong uptrending market.

You can easily check the top performers for the past 5-days and one month by going to the “Additional Fund Stats” tab on the right side of the BDH Decision Page, and arraying the Rtn-5d and Rtn-3mo column, respectively heading from high to low.  If you check the performance over the past month by hitting the down carat you will note that the best performing ETFs in our 44 ETF universe last week were XOP, BRF,SMH, VGT and ARKW.

Dark   Liquidity

The link is as follows:

www.dark-liquidity.com/index.php/strategies

The BDH strategy was up 0.72% for the year-to-date.  Clearly, XLB down 3% is not helping our portfolio.  It will be sold if it closes below $58.30.

Top 5 ETFs – 100% Invested – XLV,XLI, XLB, XHB, and QQQ

The Top 5 ETF table was attached for subscribers in last week’s email, and is not provided here. 

I have adjusted all the Stop LIMIT orders (shown in that table) to reflect current pricing, and I have made them very tight as I do not want to give up the gains if the market goes into correction mode.  Also, note that I’m suggesting stop LIMIT orders as of the closing price, not intra-day prices.

The Top 5 table was set up with the 12/31/2019 buy prices (closing) on the five ETFs and the market averages.  Therefore, this table represents the year 2020 going forward not carrying the ETF purchase prices over from 2019 so we can compare the  performance on an apples-to- apples basis with the major averages for 2020.     

     .

Game Plan Going Forward

Currently, the market keeps hitting new highs.   Make sure that you are protecting your portfolio with appropriate stop LIMIT orders that mirror your risk tolerance.

    Interim updates are sent to subscribers during the week, as needed.     Any subscriber who has recently sent in a payment and has not received this regular blog today should email me at lesmasonson@yahoo.com so I can check my records and correct any oversight.

Remember that you are responsible for your investments and how you manage them. This website was developed for educational purposes only and is not responsible for any actions you take with your investments.  If you decide to follow the BDH strategy, then you are 100% responsible for your investment outcome.  Make sure to check the BDH indicators daily during times when the market is volatile like now.  Just bookmark the charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active, so as not to miss any Dashboard signals. Decide on and place your stop LIMITS, if you use them, that meet your own risk profile.

Les

Leslie N. Masonson, MBA, CCM, is President of Cash Management Resources, a financial consulting firm that he founded in 1987. He is an ETF Strategist and currently actively trades ETFs on a daily basis Masonson’s 47-year working career has spanned financial advisory services, trading, investing, banking operations management, teaching, and cash/treasury management consulting. He was a Financial Advisor for six years offering investment management services to retail clients. Much earlier, he worked at three large banks for a total of 17 years as a Vice President at Citibank, an Assistant Vice President at Bank of America, and an Assistant Secretary at Irving Trust Company. He has written more than 140 articles – interviews with traders, software product and book reviews – for numerous financial publications including Technical Analysis of Stocks & Commodities (TASC), Active Trader, SFO and Futures magazine, as well as on Amazon. He has lectured on investing on several cruise lines including Crystal, Celebrity, and Norwegian. In November 2003, he spoke at the Intershow Online Investor’s Expo, on “Successfully Trading Stocks for a Living.” As of September 2016, he has been the ETF Columnist for TASC. Masonson has been researching and investing in the stock market for 60 years. He has invested in mutual funds, stocks, options, futures, ETFs, and commodities. Masonson has read more than 625 books on investing and trading, and he is proficient in technical analysis. He has used many investing and trading software programs over the years, including Telescan, OmniTrader, DTN, TradeStation, ULTRA, VectorVest, High Growth Stock Investing, TheWizard, and ETFReplay.com, as well as many brokerage charting programs including Fidelity Active Trader, Think or Swim, Interactive Brokers Trader Workstation, and Schwab’s StreetSmart Edge. He has been interviewed on business radio stations, as well as on cable TV on the Financial News Network and CNBC. The Wall Street Journal, USA Today, Institutional Investor, Bottom Line/Business, Inc., Las Vegas Review-Journal, and Advertising Age have interviewed him. His latest book Buy DON’T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk was published in May 2010. He has previously authored the following books: All About Market Timing: The Easy Way to Get Started, (McGraw-Hill, November 2003 and translated into Chinese in February 2010) as well as the Second Edition published in April 2011, Day Trading On The Edge: A Look-Before-You-Leap Guide to Extreme Investing, (AMACOM, 2000), Cash Cash Cash: The Three Principles of Business Survival and Success, (Harper Business, 1990), Corporate Cash Management: Techniques and Analysis, (Dow-Jones Irwin, 1985. Co-edited with Frank Fabozzi), and the Corporate Treasury Management Manual (A.S. Pratt & Sons, 1998. Editor and Contributor). In April 2011, his first ebook was published with the title Profiting from ETF Rotation Strategies in Turbulent Markets. Masonson received a BBA in Finance and Investments from The City College of New York and an MBA in Operations Research from Bernard M. Baruch College. His master’s thesis title was “Statistical Evaluation of the Relative Strength Concept of Common Stock Selection.”

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